COVID-19 brought great changes to Portuguese consumers’ lifestyles, limiting people’s movement and social interactions. Allied with the tourism decline and the ban on the sale of menthol cigarettes from May 2020, this fuelled decline in both value and volume sales of cigarettes in 2020.
The Portuguese government did not change the main elements of tobacco taxation in 2021. However, it did change the calculation for the minimum tax to considers all cigarettes introduced into the category in the previous year, instead of just the most sold brand.
Tabaqueira, the Portuguese subsidiary of Philip Morris International Inc, maintained its dominance of cigarette sales in 2021 holding more than half the total category share. Its wide product portfolio and its strong distribution network has granted the company competitive advantages during the pandemic, especially since on-trade channels were significantly impacted.
As the number of consumers concerned about health increases and the negative publicity and the pressure from public health entities around smoking gathers pace, more consumers are set to quit smoking cigarettes, leading to an overall downward trend in volume sales. Rather than the cessation of smoking, more consumers are expected to transfer to heated tobacco or other less harmful and cheaper alternatives.
After being severely affected during the COVID-19 pandemic due to restrictions imposed in the horeca channel, vending sales currently remain below pre-COVID-19 sales levels. The expected slow recovery of tourism, permanent closure of some restaurants and bars, and new consumer purchasing habits triggered by the pandemic will continue to affect vending as well as balcony sales in cafés and restaurants.
In a highly competitive but intensely regulated and taxed category such as cigarettes, innovation levels are anticipated to remain reduced. Producers are focusing their investments on the launch and development of new combustion and vaping systems.
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RETAIL SALES OF DUTY PAID CIGARETTES The definition of cigarettes for the purposes of this study is duty-paid, machine manufactured white-stick products. This does not exclude brands of cigarettes that do not use white paper but it is designed to exclude the volume of non-machine manufactured products such as bidis/beedis (India) and papirosy (Russia), and other smoking products made with tobacco but that either do not resemble cigarettes as recognised in the US or Europe, or those that are not machine manufactured. The exclusion of these products is intended to give a more accurate picture of the "true" market for cigarettes and cigars which has been distorted in official statistics and published reports because of the inclusion of hybrid products. NB Please note that due to its central importance and integration into the industry mainstream, Indonesia’s market data does include hand-rolled kreteks DUTY-FREE sales are excluded from retail sales, as are herbal cigarettes. ILLICIT TRADE CIGARETTES Not included in retail sales, but split out separately in volume terms only. Defined as non-duty paid cigarettes (includes smuggled & counterfeit/fake products combined). Legitimate cross-border sales are considered duty-paid. Sales arising from a foreign national purchasing cheaper cigarettes in bulk in a neighbouring country for personal use and exported back are attributed to the country where the purchase is made (e.g. bulk cigarette sales by British nationals in France are attributed to France).See All of Our Definitions
This report originates from Passport, our Cigarettes research and analysis database.
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